March 2021 Coincident Indices Generally Improved Month-Over-Month

The year-over-year rate of growth of the majority of coincident indices improved or was little changed relative to last month - but only half of the indices are in expansion. It should be obvious the economy entered a recession in March 2020 but likely exited in May or June 2020. Normally a recession ends when the economy starts improving.

Analyst Opinion of the Current Status of the Coincident Indicators

The reality is that most of the economic indicators have moderate to significant backward revision - and this month they are generally showing improved growth. Out of this group of coincident indicators discussed in this post, only ECRI, The New York Fed's Weekly Economic Indicator, and the Aruoba-Diebold-Scotti business conditions index have no backward revision - and are designed to track the economy in real-time.

Economic indicators that coincide with economic movements are coincident indicators. Coincident indicators by definition do not provide a forward economic view. However, trends are valid until they are no longer valid, making the trend lines on the coincident indicators a forward forecasting tool.

Note that the indices discussed in this post are the last release of that index,

Generally, the coincident indices are showing modest growth. Econintersect's analysis of the coincident indices is that:

  • The Philly Fed US Coincident index year-over-year rate of growth improved but remains in contraction year-over-year
  • The Aruoba-Diebold-Scotti business conditions show improving conditions and is in expansion year-over-year.
  • The New York Fed's Weekly Economic Indicator shows improving growth and the index is now in expansion year-over-year mostly due to the comparison to the lockdowns one year ago
  • The rate of growth of the Conference Board Coincident Index improved but remains in contraction year-over-year
  • ECRI's Coincident Index's rate of growth shows a slowing in the rate of growth but is in expansion
  • The CFNAI rate of growth significantly improved and returned to expansion.
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